The Jordanian industrial sector consists mainly of manufacturing, attractive industries, and electricity and water. These sectors are linked backward and forward with sectors such as transportation, insurance, and trade. The industrial sector is a high contributor to Jordan’s GDP as it contributed approximately with 24% in 2017, employing more than 240,000 people, most of them Jordanians, in some 18,000 industrial facilities across the Kingdom.
The importance of Jordan’s industrial sector is considerable. It accounts for about 60% of the total investments benefiting from the Investment Law and contributes significantly to the strength of the Jordanian Dinar and to the exchange rate’s stability through supplementing the Kingdom’s official reserves with foreign currency (with more than US$ 8.0 billion a year in 2017). Moreover, the industrial sector contributes to the consolidation of financial stability of Jordan by providing the treasury with more than JOD 1 billion annually in direct or indirect taxes, as each Dinar invested in industry provides the treasury with more than eight pennies of tax revenues.
Jordan’s total exports reached US$ 7.6 billion in 2017, of which apparel, potash, phosphates, fruits and vegetables, medical supplies, pharmaceutical products, and fertilizers were the main export products and goods. Countries mostly exported to include the United States, Saudi Arabia, Iraq, India, United Arab Emirates, and Indonesia. On the other hand, Jordan’s total imports totalled US$ 20.70 billion in 2017. The main imports were transportation equipment, spare parts, petroleum products, crude oil, textile yarn, fabrics, and make-up articles, primarily imported from countries such as Saudi Arabia, China, the United States, and Italy.
The importance of the industrial sector can be traced to Jordan’s strong competitiveness for industrial investors. Jordan’s location within the Middle East and North Africa (MENA) region, supported by the variety of free trade agreements (FTAs), offering access to 1.5 billion customers across more than 160 countries, enables the country to be a strategic trade route to many of its neighboring countries and regions. Continuous efforts have been made to ensure easy access of Jordanian products to international markets. The latest has been the agreement between Jordan and the EU with regards to the Relaxation of Rules of Origin over the next ten years as per July 2016. The agreement covers most industrial products, which are expected to have greater access to the EU market, such as textiles, apparel, electrical and home appliances, chemical products, plastic products, and furniture.
Jordan’s total labor force will increase from 1.65 million in 2015 to reach 4.25 million in 2040, which will increase the supply of the labor and create an opportunity for further industrial investments in the Kingdom.1
1 Human Population Council, 2017; Central Bank of Jordan, 2016; and the Jordan Chamber of Industry, 2016
3 | JORDAN INVESTMENT COMMISSION © 2017
Jordan’s attractiveness in industry is further supported by the research and development (R&D) centers and technology-focused universities, such as the University of Jordan in Amman and the Jordan University of Science and Technology in Irbid. Both universities have research centers and institutes active in advanced engineering, including the Hamdi Mango Center for Scientific Research and Nanotechnology. Al Urdonia Lil Ebda’ (BIC) was launched by the Jordan Industrial Estates Company (JIEC) in cooperation with the Jordan Enterprise Development Corporation (JEDCO), Jordan Engineers Association, and the King Abdullah II Fund for Development. The main goal of BIC is to stimulate innovation by bringing the scientific and industrial environments together. Moreover, Jordan’s main industries, potash and phosphates, are located in the southern part of the Kingdom in close proximity to the mines and the Aqaba Port, the only port in Jordan.
Industrial Sector Indicators
Direct contribution to GDP (%) 24.0
Indirect contribution to GDP (%) 40.0
Number of employees 240,000
Contribution to the national workforce (%) 15.0
Number of industrial firms 18,000
Industrial exports (US$ billion) 3.6
Contribution to national exports (%) 91.0 Source: Ministry of Industry Trade and supply 2017